What is Title Insurance?

Title Insurance

What is title insurance?

An insurance policy that protects you against loss because of a defect in the title to the property. As hard as the title company works to research property records to ensure there aren’t any error or mistakes involving the property title, things happen, especially in a city like New Orleans where property records may date back to the 1700s.

Why do you need title insurance?

Let’s suppose that somewhere in the sales history of your property there was a problem. An undisclosed mortgage or lien. A deed not properly recorded. Forged sale documents. A missing signature on a sale. An undisclosed heir. If someone challenges your legal ownership of your home, you’ll be faced with bearing the cost of fixing these problems on your own unless you have title insurance or even run the risk of losing the house itself.

How much does title insurance cost?

Costs vary, depending on the value of your home. However, you pay in full for the policy when you purchase it – there are no annual renewal fees and you have coverage for the entire time you own the covered property.

What’s the difference between an owner’s policy and a lender’s policy?

If you have a mortgage on your property, the lender will require you to purchase a lender’s policy to protect their interests, but the coverage is limited to the amount of the loan and doesn’t protect YOU, just the lender. When the loan is paid in full, the coverage ceases. For an affordable amount, you can add owner’s coverage that will remain in effect for the duration of your ownership, whether your mortgage is paid off or not.

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